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Quick update on Portugal

by Luis de Sousa Thu Jul 11th, 2013 at 03:23:57 AM EST

A quick update on the political situation in Portugal, that last evening dived further into uncertainty. Little attention is being given to these events by the international media. So far only the BBC and Deutsche Welle have picked up the story, but they haven't actually understood the President's address.

The key messages of the President's address were:

a) the agreement reached by the coalition last weekend for a new government was tacitly rejected;

b) snap elections are to take place in June 2014, when the first aid programme ends and in time for a new government to draft a budget for 2015;

c) in the following days the President will try to find support among the largest parties for a national unity (Monti-style) government to lead the country up to June 2014;

e) regular evaluations by the Troika to unlock further aid monies are tacitly suspended sine dia.

Here are the news pieces; which are clearly erroneous:

BBC | Portugal president Cavaco Silva rejects early vote

Portuguese President Anibal Cavaco Silva has rejected opposition parties' demands for an early election and approved a coalition reshuffle.

"The current government has all the authority to exercise its functions," he said in a televised address.

He also urged all main parties to reach a compromise preventing Portugal from needing a second international bailout.

Portugal was plunged into political crisis when the finance and foreign ministers resigned last week.

Deutsche Welle | Portugal President Cavaco Silva keeps faith with ruling coalition

Portugal President Anibal Cavaco Silva has said he's backing the country's ruling coalition after a political crisis that nearly caused the government's collapse. He also rejected opposition calls for a snap election.

Speaking in a televised address to the nation Wednesday evening, Cavaco Silva said that "the current government has all the authority to exercise its functions."

He appealed to the leading parties to come to a compromise that will prevent the country from needing a second financial bailout.

Once again I recall that this crisis has been triggered by the horrible budget execution figures known two weeks ago, a deficit of 10.6% of GDP for the first quarter. This means that a second aid programme is now inevitable, which has to be thoroughly prepared during the following months. This is the main reason why the President didn't call snap elections right after the resignation of the Finances and Foreign Affairs ministers.

The trouble now is finding support from all the parties that ratified the first aid programme, Conservatives (CDS), Liberals (PSD) and Socialists (PS). So far there's no indication that a national unity government initiative can succeed with all these parties involved. And no one really knows what the President will do in case this attempt fails.

Portugal has now been without a proper government for two weeks. The complexity of the situation was deepened further and no quick solution in sight.

Checking tradingeconomics, Portugal has by now essentially a balanced trade, so it could leave (or at least threaten to) without having to institute rationing and other control measures.

But is there any party willing to break with austerity? Any Syriza or Grillo with a chance to affect the status quo or will the election only be about who gets the minister salaries while killing the economy some more?

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Thu Jul 11th, 2013 at 07:12:14 AM EST
Yes, also in Parliament are the Communists (PCP) and Trotskists (BE), the later a sister party to SYRIZA. Any of these parties would invoke Article 50 if they ever got control of the government. If the election took place today these parties would have around 20% of the polls, maybe a little more with the recent soap opera staged by the governing parties. The Socialists claim that if they ever come into power the first thing they'll do is renegotiate the aid programme, although you always need willing creditors to have such negotiation.

In June of 2014 the story can be another though, several unaligned movements could morph into parties taking a considerable portion of votes.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Thu Jul 11th, 2013 at 10:59:26 AM EST
[ Parent ]
The Socialists claim that if they ever come into power the first thing they'll do is renegotiate the aid programme, although you always need willing creditors to have such negotiation.

See the current Greek government, which promised the same upon its formation, and where are we now. But the real idiots aren't the parties, but voters who buy into such a transparently stillborn idea and end up voting for more austerity.

Now, assuming you end up with earlier new elections or there won't be big changes in voting trends until June 2014, what fields would (could) a new more-of-the-same government target with new cuts?

(Grammar note: you don't need the "of" between June and 2014.)

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Thu Jul 11th, 2013 at 02:06:15 PM EST
[ Parent ]
To your question: I'd expect cuts on retirement programmes and a large slash of public workers.

I just like the 'of' between them.

You might find me At The Edge Of Time.

by Luis de Sousa (luis[dot]a[dot]de[dot]sousa[at]gmail[dot]com) on Thu Jul 11th, 2013 at 04:46:16 PM EST
[ Parent ]

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